By Anthony O. Goriainoff

The European Commission said Tuesday that France must recover state aid received by Ryanair Holdings PLC that was incompatible with European Union regulations.

The EU's executive branch said the French government must recover 8.4 million euros ($8.6 million) from the Irish airline after several contracts with La Rochelle airport between 2003 and 2010 constituted illegal state aid.

U.K. carrier Jet2 PLC will also have to repay EUR81,000 in French state aid due to similar contracts signed with the airport, the EC said.

The contract conditions gave an unfair advantage to both airlines over competitors, as a profit-driven airport operator would unlikely have granted such conditions, it said.

Although public airports can offer airlines attractive conditions to stimulate traffic, these shouldn't go beyond what a profit-driven airport operator would be willing to offer under the same circumstances, following the market economy investor principle, the commission added.

"If this principle is not respected, the conditions constitute state aid and the Commission must then verify whether they can be considered compatible with the EU rules on state aid," the European Commission said.

Neither Ryanair nor Jet2 were immediately available for comment.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

July 26, 2022 08:43 ET (12:43 GMT)

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